H+H International (HH) Q2 2025 earnings summary

Executive summary

• Group performance in H1 2025 was significantly impacted by a challenging German market, with low volumes and intense price competition compressing margins and group earnings.

• Strategic restructuring in Germany is underway, shifting from a national to a regional profit center model to address persistent losses and improve profitability.

• Special items of DKK 612 million were recognized, mainly due to German business restructuring and asset impairments.

• Other markets, notably Poland and the UK, showed strong performance, with Poland delivering 5% organic growth and the UK benefiting from increased demand and a favorable interest rate environment.

• Net loss for H1 2025 was DKK 628 million, compared to a loss of DKK 159 million in H1 2024.

Financial highlights

• Group volumes were slightly down year-over-year, with Poland meeting expectations, the UK ramping up production, and Germany underperforming due to market conditions.

• Gross margin before special items improved to 22% from 18% year-over-year; EBIT margin at 3% versus -1%; EBITDA margin at 10% from 6% year-over-year.

• Cash flow from operating activities before financial items and tax was -DKK 19 million in Q2 2025, down from DKK 80 million in Q2 2024; free cash flow was negative DKK 51 million in Q2 2025.

• Net interest-bearing debt stood at DKK 837 million at June 30, 2025, with financial gearing at 2.6x net interest-bearing debt to EBITDA.

• Equity decreased to DKK 1,035 million at June 30, 2025, from DKK 1,543 million a year earlier.

Outlook and guidance

• Organic revenue growth for 2025 is expected to be around 4%, revised from previous 5%-10%.

• EBIT before special items is now guided at DKK 100-150 million, down from DKK 120-180 million.

• Modest volume growth anticipated in the UK, stable development in Poland, and no improvement assumed for Germany.

• CAPEX for 2025 is projected at around DKK 180 million.

• No near-term recovery is expected in Germany, with a flat market outlook and conservative growth assumptions applied.